Predicting choice-averse and choice-loving behaviors in a field experiment with actual shoppers

54 Pages Posted: 1 Jul 2020 Last revised: 21 Jun 2021

See all articles by David Ong

David Ong

Jinan University-University of Birmingham Joint Institute

Date Written: July 1, 2020

Abstract

A large body of chiefly laboratory research has attempted to demonstrate that people can exhibit choice-averse behavior from cognitive overload when faced with many options. However, meta-analyses of these studies, which are generally of one or two product lines, reveal conflicting results. Findings of choice-averse behavior are balanced by findings of choice-loving behavior. Unexplored is the possibility that many consumers may purchase to reveal their tastes for unfamiliar products, rather than attempt to forecast their tastes before purchase. I model such ‘sampling-search’ behavior and predict that the purchases of unfamiliar consumers increase with the available number of varieties for popular/mainstream product lines and decrease for niche product lines. To test these predictions, I develop a measure of popularity based on a survey of 1,440 shoppers for their preferences over 24 product lines with 339 varieties at a large supermarket in China. 35,694 shoppers were video recorded after the varieties they faced on shelves were randomly reduced. As found in the meta-studies, choice-averse behavior was balanced by choice-loving behavior. However, as predicted, the probability of choice-loving behavior increases with the number of available varieties for popular product lines, whereas choice-averse behavior increases with available varieties for niche product lines. These findings suggest that increasing the number of varieties has predictable opposing effects on sales, depending upon the popularity of the product line, and opens the possibility of reconciling apparently conflicting prior results.

Keywords: field experiment, choice overload, choice aversion, consumer search

JEL Classification: C93, D83, M31

Suggested Citation

Ong, David, Predicting choice-averse and choice-loving behaviors in a field experiment with actual shoppers (July 1, 2020). Journal of Economic Behavior and Organization, Forthcoming August 2021, Volume 188, p 46-71, Available at SSRN: https://ssrn.com/abstract=3613586 or http://dx.doi.org/10.2139/ssrn.3613586

David Ong (Contact Author)

Jinan University-University of Birmingham Joint Institute ( email )

Jinan University
University City, Panyu
Guangzhou, Guangdong 510632
China

HOME PAGE: http://https://birmingham.jnu.edu.cn/

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